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A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 6

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [6] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “I am From Mars”

Because of my experiences in the private sector, I sometimes had difficulty fitting into the IRS fabric.

One example of this involved the high-profile debate about whether stock options should be expensed for financial statement purposes. This issue was extraordinarily intense during the 2003-2004 time period, with the Financial Accounting Standards Board (FASB) arguing that stock options should be reflected as an expense on the financial statements while industry argued that they should be reflected as an item on the balance sheet. Most employees in the high-technology sector agreed that they should be reflected as an item on the balance sheet, and I strongly supported the high-technology position.

This topic has no bearing on the filing of a corporate tax return. For tax return purposes, stock option exercises usually are treated as an income tax expense.

My colleagues in the IRS often would argue about this issue over lunch or at other meetings. Almost universally they Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 5

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [5] of a series of a Chapter in the eBook “Corporate Tax Audit Survival- A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “The System”

One of my first IRS assignments was to co-manage a project associated with updating the corporate tax return filing system.

Together with another LMSB executive, I met with a group of IRS employees who had been detailed to a design team for this purpose. An outside consulting firm had been hired to assist the IRS team.

The design team and outside consultant had been discussing options for several weeks. Every wall of the meeting room was plastered with large sheets of paper listing the pros and cons of the project. I asked if they had arrived at any conclusions, and they said they had gotten so mired down in the project details that they were having trouble making any recommendations.

The group asked us to review a report that they were writing to management. We suggested they compose an executive summary to the document in order to help crystallize their thinking. They went back to work and returned with a ten-page executive summary for a 50-page report. Furthermore, the report contained no conclusions. They simply had not been able to identify the major issues. Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 4

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [4] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “Big Brother”

When I first engaged the IRS voice messaging system, I was stunned by the message: “Welcome to the IRS voice messaging system. Unauthorized use of this facility could result in civil and criminal penalties.” After this admonition, I was almost afraid to use the IRS phone system.

A few days later I received an email message warning me that I could be disciplined if I did not pay my government credit card bill on time. I thought, “Am I working with a bunch of deadbeats?”

Shortly thereafter I received a sternly-worded message telling me there would be severe consequences, including possible termination of employment, if I incurred estimated tax payment penalties for underpayment of estimated taxes or if I made a mistake on my federal income tax return. I thought, “Am I working with a bunch of tax cheats?” Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 3

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [3] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4 “Acronymphobia”

The Internal Revenue Service (IRS) is an agency that thrives on the use of acronyms. In fact, acronyms flourish to their greatest heights at the Large and Mid-Size Business Division (LMSB) headquarters in the Mint Building in Washington D.C., where “Mintspeak” crops up in every discussion.

In one of my first meetings, I sat among several IRS career employees in the Mint Building. The discussion leader started by saying that we were meeting on the “ABC issue for the DEF area of the GHI problem.” I raised my hand and said, “Excuse me, would you mind telling me what the ‘ABC issue for the DEF area of the GHI problem’ is?” The leader courteously explained the three acronyms to me while the others in the room squirmed in their chairs. I thanked him.

The leader went on. “The GHI problem has a connection to the JKL and MNO and PQR problems, which we need to solve PDQ.” I raised my hand again and said, “Excuse me, would you mind telling me what ‘JKL’ and ‘MNO’ and ‘PDQ’ stand for? And what is ‘PDQ’?” The leader explained the acronyms, and the old-timers rolled their eyes. Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 2

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [2] of a series of a Chapter in the eBook “Corporate Tax Audit Survival- A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “Spy/Traitor/Disbelief”

When I showed up for work my first day at my San Jose office, I was met by a very nice group of IRS employees. I could tell they wondered what a corporate person was doing in their midst. They were friendly, but in a decidedly reserved way. I sensed some of them thought of me as a corporate spy.

I was joining the Service as the highest ranking IRS employee in the San Jose region. The person designated as the Commissioner’s Representative for my building gave me a pass to be able to enter into the secured office areas. I saw file cabinets full of confidential corporate taxpayer information. For someone who had spent most of his career opposing the IRS, it seemed strange being here. I felt like the fox that was being asked to guard the hen house.

Just a few miles away, my former corporate tax colleagues were talking about me, wondering if I had become a traitor among them. Would I be turning over the secrets of the corporate community? Would I be someone they would want to talk to again? Frankly, I had been out of the corporate tax department world for several years at this time and was hardly in a position to give away corporate tax department secrets. Nonetheless, the tax community was concerned. Read more

A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 1

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [1] of a series of a Chapter in the eBook “Corporate Tax Audit Survival – A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “I am the CTM SIA from the POD San Jose. I am from Mars”

Most individuals who move from the private sector to the public sector have an agenda they want to accomplish during their public term. I was no different.

Prior to my term with the IRS, I spent over 20 years engaging members of the U.S. Congress and their staffs on a variety of tax and other policy issues. I noticed that most of them came to Washington with clear personal agendas.

Some felt that government was too intrusive, and they wanted to lessen its impact on our lives. Others felt just the opposite. Some came to further a social cause. Some came to help create high-paying U.S. jobs and increase U.S. competitiveness around the world. Some wanted to make government processes run more efficiently. Read more

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